Pandora sees surge in listenership in top 10 markets

Stock jumps 6% on news the radio music service stats improved across major U.S. radio markets

I speculated a few days ago that online streaming music site Pandora may be in trouble, due to its mega-competitor Spotify adding a very Pandora-esque Radio feature to its already better quality of service. But it seems Pandora has reason to breathe easy, at least for the time being.

Pandora posted its November listening stats in the Top-10 radio markets in the U.S., and the streaming service actually saw Average Quarter Hour (AQH) gains in all 10 markets since September 2011. The New York Metro Area recorded the biggest gains at 25%. The rest of the markets recorded gains ranging between 13 and 25%.

On the news, shares of Pandora rose 6% to $10.57.

The AQH metric is based on an average of one percent of the targeted population listening for at least five minutes within the span of a quarter of an hour. Each AQH point indicates one percentage point of the total targeted population.

Pandora's weekly cumulative audience ranked more than 19.9% in each of the metro survey areas, for the 18-34 demographic. in the 18-49 demographic, Pandora's weekly cumulative audience ranked over 1 million listeners in both the New York and Los Angeles metropolitan areas, for the first time ever.

Add to that Pandora's stronger than expected Q3 earning's reports, bringing in $75 million on its ad-supported play model, higher than analysts' Q3 estimates of $71.4 million. Pandora is expected to bring in between $80-84 million for Q4, and about $273 million for the fiscal year.

November also saw a partnership between Pandora and marketing form DMX, to create a set-top music player for the purposes of pumping music on customizable radio stations into businesses. Pandora hopes to offer a slightly hipper alternative to the canned elevator music that has become a mainstay of lameness in our larger cultural consciousness. The set-top device costs $99.95, with a $24.99 per month subscription fee. 

Pandora users listened to over 2.1 billion total hours of play during Q3, which is a 104% increase from the same period during the previous year. The service has 40 million active users and can claim 66 % of Internet radio-listening in the U.S.

Then again Pandora's strong Q3 happened well before Spotify lowered the boom on their own Radio function. Pandora is definitely enjoying a comfortable ride right now, but I think come 2012 when that Spotify Radio function starts doing its thing, the road might start to get a little bit bumpier for Pandora.